ATM LEASEBACK SCHEMES-- any insight?

[Lost Income]

Agreed, as long as this remain a corp bankruptcy and doesn't turn into fraud or ponzi, doubtful Joel & Ed's personal possessions will be liquidated. Joel & Ed are likely being coached by an attorney right now, so there's lots we don't know yet.

[The Observer]

The transfer of the house has the veneer of a separate action apart from what happened with NAS. Whoever decides that the transfer has to be attacked for the purpose of putting the property into the bankruptcy estate are going to have prove several things to a court of law:

(1) that NASI was an alter-ego of Ed or that Ed was paying for the house with funds that were illegally or fraudulently taken from NAS. If Ed can show that the house was paid for by other funds or no one else can prove that the funds for the house originated with NASI, then you can forget it. Gotta establish a nexus between NASI, Ed and the house.

(2) that the transfer of the property left Ed insolvent - not NASI (unless the alter-ego is established)

(3) that the transfer of the house in of itself was done for less than fair-market value

(4) that the transfer was done with the purpose of putting it out of the reach of creditors or the legal system

(5) that Ed's wife was not involved in the scam or benefitted from it (otherwise she will be able to contest the conveyance of her legal interest in the property and protect that interest from being awarded to the creditors)

This action of Ed has the odor of a rotten fish about it and it does indicate that he probably wasn't thinking too far ahead. But then again, maybe Ed has a different game plan. If anything, what he should have done was to borrow against the property and encumber it up to the hilt, thus making it an unttractive target to any creditor. That could still happen by the wife, and it may very well be their next step, if they haven't already started it. Ed may have put the property in the wife's name so that any title search done may overlook his involvement in the property and allow the loan to go through.

If so, the title is going to be very cloudy and the cost to clear that will be another expensive action on the part of the creditors since the lender is going to to protect their loan in the property.

[Lost Income]

Sounds like this court date can't happen soon enough.

[grimreaper]

Next *Shoe to Drop*??

http://www.ponziclawbacks.com/2014/01/0 ... -for-2014/

Happy New Year! It is a time to contemplate New Year’s resolutions – if not to make them. We’ve thought about this within the context of our Ponzi Clawbacks blog. Ponzi Clawbacks began as an effort to understand and stay current on legal issues that arise when SEC Receivers, bankruptcy trustees or state receivers, name victims of Ponzi schemes as defendants in clawback court actions and seek the return of their investment money. Our blog has wide coast-to-coast readership. We have posted over 200 stories since our September, 2012 beginnings. We have a large database of documents rich in content reflecting the legal ramifications of Ponzi schemes.

We know that our blog is full of tragicomedy, for Ponzi schemes are often works combining tragedy and comedy. Comedy is evident in many cases – one of our recent stories addressed a scheme where investments were marketed as incomprehensively sophisticated – understandable to no one but the organizer. Tragicomedy does have its victims – those that have been defrauded and also those that did the defrauding. Families suffer the after-affects of Ponzi schemes, as do the communities from which the victims are drawn.

There is little laughter when the tables are turned on Ponzi organizers. Organizers’ lives and their families’ lives are shattered. Imprisonment for those who must account for their actions brings smiles to no one. Plea bargains coupled with entreaties for mercy reflect on our human condition – as a respected judge that I worked for almost 40 years ago often told me – “There but for the grace of God go you or I.” His statement was not offered as an excuse; it was an acknowledgment of human failings and that each life is special. Each life has a story. We are all children of God, we all fail in some ways, and mercy is a virtue that we all need at some point in our lives.

Our New Year’s resolution for Ponzi Clawbacks is to stay close to the genesis of our work. We have seen the pain of Ponzi victims who feel victimized a second time when they must defend clawback lawsuits. In our experience, net winners – those who received more money back than they invested – will readily acknowledge their “net winnings” and work with the SEC Receiver, bankruptcy trustee or state receiver to return these “winnings” for a later distribution to all net losers. We have successfully resolved a number of these cases.

We think that there is strong public policy that supports the rule that SEC receivers may only pursue actions against “net winners.” We have written about bankruptcy trustees and state receivers that worked hard to fairly resolve their cases against “net losers” – resolutions that accounted for financial hardship and the totality of the circumstances of the investment. We think such resolutions more constructive to all concerned and supportive of judicial economy. For those cases not capable of resolution, we think that the available legal affirmative defenses showing investments made in good faith and for value often have great vitality.

Ponzi Clawbacks will continue to address the issues of fairness that arise when Ponzi victims become unwitting defendants of clawback actions. We are thankful for the opportunity to assist such victims in 2013, and we recommit to such service in 2014.

MORE :

http://www.ponziclawbacks.com/2013/01/2 ... revisited/

U.S. District Judge David Godbey’s 32-page Order allowing the Receiver in the R. Allen Stanford Receivership Estate to “clawback,” or recover, all back interest payments paid to Stanford investors is a worthy read as a remedial lesson in the character of Ponzi-based clawback actions. Court-appointed receivers often file lawsuits or clawback actions against investors who were “Net Winners” in Ponzi schemes. Net Winners are those investors who received payments in excess of their principal investment.

Judge Godbey’s ultimate decision reinforced “the general rule that investors may keep principal payments but must return interest payments.” The Court noted that the “investor has a claim for fraud or restitution for the principal he or she was fraudulently induced to lend.” The Court acknowledged that “in at least some circumstances, the Receiver would like to recoup the Net Winners’ principal as well. That argument is for another day. …”

At a time when adversary actions against duped Ponzi investors are being brought with great frequency by court-appointed receivers, it’s beneficial to revisit the nature of many of these actions that dot the national legal landscape. Ordinary citizens, not schooled in the particularities of clawback litigation, often recite that all Ponzi investors who received less than promised have been defrauded. Cases like that decided by Judge Godbey note or allude to the more definitive fundamentals that separate Ponzi victims.

Net Losers are Ponzi victims who did not receive all of their principal investment back. Judge Godbey acknowledged that the Stanford Receiver would “at least in some circumstances” like to recoup the Net Winners’ principal as well. It’s worthwhile to separate Net Winner cases from Net Loser cases. Net Winners, like those in the Stanford receivership, have received something in excess of their principal invested. Net Losers have received something less than their principal invested.

Simple actions against Net Winners do not carry the same burdens as those against Net Losers. Net Winners have no legitimate claim to interest in Ponzi scheme cases while Net Losers do have legitimate claims to investment principal. This fundamental divide has resulted in emotionally charged and spirited defenses asserted by Net Losers against ambitious Receivers. Opinions like Judge Godbey’s Order make possible a broader discussion into the nature of adversary actions against defrauded Ponzi investors.




The Court recognizes that forcing Net Winners to pay back interest payments will
cause some pain. But for victims of a Ponzi scheme, everyone is a loser.
See Donell v.
Kowell
, 533 F.3d 762, 779 (9th Cir. 2008) (“Ponzi schemes leave no true winners once the
scheme collapses — even the winners were defrauded, because their returns were illusory.”).
And the Net Winners will be in far better shape, having recovered at least their principal,
than most Stanford victims, who lost everything.
10
Allowing Net Winners to keep their
fraudulent above-market returns in addition to their principal would simply further victimize
the true Stanford victims, whose money paid the fraudulent interest. Although other courts
have sometimes disagreed, the Court finds that avoiding the interest payments is the most
equitable and just solution to a difficult problem.

[Tednewsom]

Imprisonment for those who must account for their actions brings smiles to no one.

Oh, I dunno about that one.

[grimreaper]

Following is my understanding of the current situation per all posts above. Please chime in if anyone has solid info to suggest otherwise.

Currently, Joel & Ed will likely soon be agreeing to bankruptcy which will be processed like a typical bankruptcy selling off company assets to pay debts & investors. If during the bankruptcy process it's discovered that all the ATM's which need to be sold, are not owned by NAS, then the process could quickly proceed as fraud or ponzi to sell off both company and Joel/Ed's assets and attempt clawbacks. So far fraud or ponzi potential has not become glaring enough to the SEC for them to charge Joel & Ed with this.

It's not a matter of being *Glaring enough*. They need make sure they have ALL evidence marshaled and put in order. That takes time and they're not going to comment until you see formal charges, which I would expect (my opinion only) within a month or two. They've been investigating since Mid June, when they subpoenaed documents. I would think it could take Joel a month or more to submit them.

EDITED: All documents had to be submitted by July 2, per subpoena.

[Lost Income]

Your comment assumes that the SEC is diligently investigating this. I have information that could help the SEC, I sent e-mail and voice mail to Sara (mentioned earlier in this post) about having helpful info to provide, and I never received a reply to either. This is disappointing.

[snookered]

Your comment assumes that the SEC is diligently investigating this. I have information that could help the SEC, I sent e-mail and voice mail to Sara (mentioned earlier in this post) about having helpful info to provide, and I never received a reply to either. This is disappointing.

I think all of us have information that would be helpful to them. When they are ready, they will ask for it.

[grimreaper]

Your comment assumes that the SEC is diligently investigating this. I have information that could help the SEC, I sent e-mail and voice mail to Sara (mentioned earlier in this post) about having helpful info to provide, and I never received a reply to either. This is disappointing.

I think all of us have information that would be helpful to them. When they are ready, they will ask for it.

Perhaps. Unless he has ditched ALL RECORDS, they will be able to determine if he has duplicate or phantom machines. All depends on what records are available. If they need additional info, then they could contact investors. Just have to wait it out.

[Tednewsom]

I doubt if they would ditch all their records, even if they'd have thought of it. Let's face it, these two schmoes were not exactly Moriarty and Blofeld. Gillis shot his mouth off publically to at least one website (that Australian thing, three or four years ago), he and Wisher both acted like kids with their hands in the cookie jar when genuinely knowledgeable investors asked the right questions, and so on. They weren't even particularly inventive about their thievery: their scheme is just a Xerox of all the other ATM leaseback rip-offs over the last 25 years (my point back in my original post)-- which were themselves carbon copies of the office equipment/pay phone/ Xerox machine scams of the decades before that. They were simply bad actors following a script someone else wrote years before.

Grifters. Sociopathic, street-level smart, unimaginative grifters.

[snookered]

I doubt if they would ditch all their records, even if they'd have thought of it. Let's face it, these two schmoes were not exactly Moriarty and Blofeld. Gillis shot his mouth off publically to at least one website (that Australian thing, three or four years ago), he and Wisher both acted like kids with their hands in the cookie jar when genuinely knowledgeable investors asked the right questions, and so on. They weren't even particularly inventive about their thievery: their scheme is just a Xerox of all the other ATM leaseback rip-offs over the last 25 years (my point back in my original post)-- which were themselves carbon copies of the office equipment/pay phone/ Xerox machine scams of the decades before that. They were simply bad actors following a script someone else wrote years before.

Grifters. Sociopathic, street-level smart, unimaginative grifters.

I couldn't agree more

[notorial dissent]

It may not be so much a case of ditching their records, as what records they actually kept. They obviously kept enough that were accurate enough to send out their monthly statements and checks, although there has been some note of errors.

Which is why I keep saying for everyone involved to get ALL their records relating to NASI together and get them copied, and to keep the originals and keep them somewhere safe. If this turns in to a full scale receivership, which it probably will, they will become necessary for proof of claim. It will also be good to have them all together so that you can speak to your lawyer and/or tax professional as you most likely will need to.

At this point patience is all there is until whoever is going to do something finally does.

[grimreaper]

Found this recent ATM Ponzi. May give some indication of what to expect.
http://www.sec.gov/litigation/litreleas ... r23095.htm

The scam folded at the end of 2013>>>>

"According to the SEC's complaint, Ferguson paid investors far more than he was earning from his ATM and branding businesses, and when the earnings dried up in 2011, he continued to raise funds from investors and pay them purported profits up until late 2013."

He was arrested by County Prosecutor around THREE months later>>>

"In March 2014, the Santa Clara County District Attorney's Office arrested Ferguson and charged him with securities fraud, burglary, and grand theft in connection with his ATM business. He was recently released pending trial"

And now...7 MONTHS later, the SEC filing>>>>

S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 23095 / September 29, 2014

Securities and Exchange Commission v. Michael B. Ferguson and Transactions Unlimited, Civil Action No. 3:14-cv-04188 (N.D. Cal.)

The Securities and Exchange Commission today charged a Foster City, Calif., businessman and his company with bilking more than $12 million from investors in a fraudulent automated teller machine (ATM) scheme that unraveled late last year

[grimreaper]

In Calif can they reach back 7 years for distributions?

Calif Civil Code:
http://www.leginfo.ca.gov/cgi-bin/displ ... 39-3439.12

3439.09. A cause of action with respect to a fraudulent transfer or
obligation under this chapter is extinguished unless action is
brought pursuant to subdivision (a) of Section 3439.07 or levy made
as provided in subdivision (b) or (c) of Section 3439.07:
(a) Under paragraph (1) of subdivision (a) of Section 3439.04,
within four years after the transfer was made or the obligation was
incurred or, if later, within one year after the transfer or
obligation was or could reasonably have been discovered by the
claimant.
(b) Under paragraph (2) of subdivision (a) of Section 3439.04 or
Section 3439.05, within four years after the transfer was made or the
obligation was incurred.
(c) Notwithstanding any other provision of law, a cause of action
with respect to a fraudulent transfer or obligation is extinguished
if no action is brought or levy made within seven years after the
transfer was made or the obligation was incurred.

[grimreaper]

For your *ENTERTAINMENT* Enjoy! LOL

http://www.marketwired.com/press-releas ... 751444.htm


January 30, 2013 14:28 ET
Nationwide Automated Systems Rated #1 Provider of ATM Systems

CALABASAS, CA--(Marketwire - Jan 30, 2013) - In a recent poll it was determined that most high-traffic retail location owners prefer ATM machines provided by Nationwide Automated Systems, Inc. over the competition. Poll recipients were asked to rate ATM providers in the following categories: revenue-sharing models, customer service, operation and aesthetics.

Participants noted that Nationwide Automated Systems (NAS) aggressive revenue-sharing stance, which grants location owners a percentage of the fees associated with transactions, was among the best in the industry. The company's ATM machines were also praised for their functionality. One poll recipient went on record stating, "Only once have I had an operational issue with my machine. I called a representative and he sent someone over within hours, not days. Since then, no other issues have occurred. It's been a pleasure working with Nationwide Automated Systems."

NAS boasts over 80 branches and 1,000 certified technicians on standby -- which accounts for the rapid response time noted by most poll recipients. In addition, the company works with one of the world most reliable processing partners, WorldPay US, Inc. This partnership allows NAS to service more than $1 billion transactions in a month's time.

Partakers in the poll also noted that ATM machines provided by NAS were well placed and aesthetically pleasing. Due to its partnership with many leading ATM manufacturers, NAS can customize machines to the retail location owner's preferences. For instance, the company offers custom-designed wood cabinet options, designed to match the visual feel of the retail location. A hotel owner stated, "You would never believe that the ATM machine was provided by an outside vendor. It integrates itself wonderfully into the hotel's ambiance."

Due to the feedback of satisfied customers and the accelerated growth of the company, NAS has decided to expand into Puerto Rico, with plans to pursue global growth strategies in the United Kingdom, Mexico and Canada.

About National Automated Systems, Inc.:

Nationwide Automated Systems, Inc. is an ATM machine provider based in Calabasas, California and run by Joel Gillis. It works with high-traffic retail locations, hotels, casinos, convenience stores and movie theatres located throughout the United States. The company has been consistently recognized for its exceptional customer service, sturdy machines and aggressive revenue-sharing model.

[CoachSG]

I have a number of significant documents that I feel should be posted. Moderator or someone please contact me and I will email to you for posting. The SEC yesterday secured a (TRO)Temporary Restraining Order in Central California Federal District Court. To summarize, they threw the book at Gillis, Wishner, NASI, and 2 other compananies allegedly Wishner created to hide/funnel funds. Oasis Studio Rentals LLC and Relief Defendants. Claimed in the 13 page action is that NASI investors actually owned only 235 machines and NASI only 673 in total. Some locations allegedly sold by NASI more than 5X that they didn't own. additionally alleged that NASI raised over 123 million from investors since just JAN 2013 and had less than 200K in the bank when they attempted to open new bank accounts as of late AUG 2014. All corporate and personal assets are attached to the complaint. The court approved a receiver and the granting of the TRO supersedes the bankruptcy action. What the SEC in effect did was made an offer of prima fascaie(sp?) case which they showed enough to justify the TRO. The SEC in the complaint alleges numerous crimes and also referenced both the FBI, FTC, and Federal Interstate Commerce Commission for concurrent criminal investigation.

This freezes any further elusive action the thieves can accomplish and puts the SEC in the drivers seat. The response indicated the court found enough evidence in every allegation to grant the TRO.

[CoachSG]

And also I forgot to mention, neither Gillis, Wishner, or any counsel appeared to answer for NASI.

[webhick]

Holy shit. Check your PMs.

[grimreaper]

I have a number of significant documents that I feel should be posted. Moderator or someone please contact me and I will email to you for posting. The SEC yesterday secured a (TRO)Temporary Restraining Order in Central California Federal District Court. To summarize, they threw the book at Gillis, Wishner, NASI, and 2 other compananies allegedly Wishner created to hide/funnel funds. Oasis Studio Rentals LLC and Relief Defendants. Claimed in the 13 page action is that NASI investors actually owned only 235 machines and NASI only 673 in total. Some locations allegedly sold by NASI more than 5X that they didn't own. additionally alleged that NASI raised over 123 million from investors since just JAN 2013 and had less than 200K in the bank when they attempted to open new bank accounts as of late AUG 2014. All corporate and personal assets are attached to the complaint. The court approved a receiver and the granting of the TRO supersedes the bankruptcy action. What the SEC in effect did was made an offer of prima fascaie(sp?) case which they showed enough to justify the TRO. The SEC in the complaint alleges numerous crimes and also referenced both the FBI, FTC, and Federal Interstate Commerce Commission for concurrent criminal investigation.

This freezes any further elusive action the thieves can accomplish and puts the SEC in the drivers seat. The response indicated the court found enough evidence in every allegation to grant the TRO.

As expected. Thank you.

[notorial dissent]

Well, well, and well. If the above message from CoachSG is genuine, and I have no reason to think it isn't, don't that just put a whole new complexion on things!!!! Buh bye bankruptcy and hello receivership, and not a pretty one from the sounds of it. So 908 machines in total, not pretty at all, and next to no money in the til.

On the plus side this way they can go after anything they can find as far as the "boys" are concerned, deed tricks or otherwise, the problem is that there has to be something to find. I would suspect the two "investments" are going to get a thorough looking over now as well, whether it will accomplish anything remains to be seen.